There are a variety of less than forthright organizations that allegedly help individuals sell their inventions to industry. In most my many years of being employed as a patent lawyer, I have never come across a single person who ever used one of those organizations to effectively market or sell their invention. However, I actually have met several who successfully marketed their inventions themselves.
Before you take any steps to my company, you should require a few preliminary steps.
Patent Application – Don’t publicly disclose your invention until after having a patent application is filed. Publically disclosing the invention before filing a patent application could very well ruin the chances of ever being granted a real patent. The truth is, some companies is not going to even speak to you until you have filed a patent application.
Prepare a Formal Information Package – You should prepare an informative and concise information package describing you, your invention as well as the potential promote your invention reaches. The package needs to include color photographs from the invention, as well as a one page executive summary.
Prototype – It is much easier to offer a product or service if prospective buyers can easily see, touch and have the product. Creating a working prototype is usually a key step in selling your invention. Needless to say, some products are tough to prototype, whereby a non-working mock-up may have to do. In almost any event, create the most professional prototype or mock-up you can.
Obtain Financing – Building prototypes and filing patent applications require funds. Discovering that initial start up funding is often difficult; however, there are 2 tried and tested methods, namely partnerships and incorporations. A signed partnership agreement is a sure way for a couple customers to pool their financial resources in to a project. If several investors come to mind, then an incorporated company is a much better method. Essentially, the company takes ownership of your invention and the investors contribute money on the company in return for shares. The number and cost from the shares may be tailored to fit the specific needs of the project.
Seeing that we now have addressed some of the preliminary issues, allow us to check out the mechanics of selling your invention to some company. The actual steps in the process are the following:
1. Compiling a summary of Prospective Buyers – Finding a company that is ready to find the invention is the most challenging section of the process. It begins by generating a listing of companies that may be enthusiastic about the site here. Use a business directory to generate that list. Business directories list companies from the products they manufacture (or services they supply) and can include basic information regarding these companies such as their address, phone and fax number, and the name of the president (CEO or owner). Suitable business directories may be located in the business part of the local reference library.
2. Contacting Potential Customers – Your list of prospective buyers might include literally hundreds of companies. You only call up each company listed and request them should they would be interested in getting a solicitation for any new invention. Then get the contact information about who from the company to send your information to.
3. Presenting the Invention to Prospects – After you have thinned out your list, the next step is usually to submit your data to all of the companies on the list. This can involve calling the people identified to become the “contact” for new product ideas and telling them that you are sending them an information package regarding your product. Your package ought to include a cover letter and a one page synopsis of your own product (such as a picture). The details should be clear, concise and yes it must appear as professional as you possibly can. Don’t attempt to overwhelm the recipient – you want to impress them, not burden them.
4. Follow Up – Tend not to expect the prospect to come to a quick decision in regards to the invention. It might take a prospect many months (also a year or more) to help make up his/her mind on the project. You should be patient. You should periodically follow-up with all the company but tend not to “pester” the prospect. Remember, individuals considering your invention are most likely quite busy with other projects – annoying them may do little to speed the project up and may even make them drop the project altogether.
5. Negotiations – If you discover a company that may be enthusiastic about picking up the project, then be ready to negotiate the relation to the sale. The important thing here is to be reasonable. From my experience, nothing kills off a prospective licencing deal faster than an unreasonable inventor. Realistically, one of the most you will probably get is a great return on your own investment. Seeking a smaller signing fee plus a modest royalty is far more very likely to generate a signed agreement than holding out to get a big payoff.
6. Royalty Amount – I am usually asked the question “simply how much can I sell browse around these guys for”. I don’t be aware of answer; however, below are a few rules that can assist you figure out a 1nventhelp royalty rate. To start with, try and negotiate a royalty which is separated straight into two parts, an initial signing payment along with an annual royalty payment. The original payment should cover much of your costs from the project. The annual royalties should represent an amount which can be sufficient to represent a great return on your investment without having to be a burden about the manufacturer. The typical “general guideline” is to request a compact percentage (1% to 5%) in the net sales in the product. Additionally it is possible, and in many cases advisable, to fix the annual royalty payment for an easily calculated amount (e.g. $1.00 per unit sold).